A U.K. delivery company that very few have heard of is poised to expand into the U.S. same-day delivery market, with a little help from a company that everyone has heard of.
London-based Shutl, which has been providing same-day delivery service in the United Kingdom since March 2010, said it plans to enter the U.S. market in early 2013. It will be aided by a $2 million investment from, among others, the UPS Strategic Enterprise Fund, the private equity arm of UPS Inc. Other investors include European express provider GeoPost and venture capital firm Hummingbird Ventures, Shutl said.
In a statement, Shutl said it will use the proceeds to acquire retail partners that will help its push into the United States. "The investment demonstrates the interest of UPS in exploring different options for helping retailers serve online customers," the company said in a statement.
Tom Allison, Shutl's founder and CEO, estimated that the U.S. same-day delivery market would be worth $26 billion in 2016.
Shutl uses local courier companies to provide deliveries to online and in-store customers either within 90 minutes, or within a one-hour window of their choice. It boasts the record for the world's fastest e-commerce delivery, with a customer taking receipt of their goods within 15 minutes of checking out online.
Shutl's move comes as e-tailing giant Amazon.com and online auctioneer eBay are strongly weighing the potential of same-day delivery services. According to a recent published report, Amazon plans to build or lease new distribution centers (DCs) in at least six states after agreeing to collect sales taxes in those states. By doing so, Amazon can legally open warehouses and DCs in some of the nation's most heavily populated areas and offer same-day deliveries for an additional fee, according to the report.